Lithuania

Lithuania carries the memory of empire. In the 15th century, the Grand Duchy of Lithuania was the largest state in Europe, stretching from the Baltic Sea to the Black Sea. Today it is a nation of 2.8 million people learning to punch above its weight through fintech and lasers. The contrast defines Lithuanian ambition.

Mindaugas unified Lithuanian tribes and was crowned king in 1253—one of the last pagan rulers in Europe. For two centuries, the Grand Duchy expanded eastward into the lands of Kievan Rus', absorbing territories that would become Belarus and Ukraine. The Union of Krewo (1385) joined Lithuania dynastically with Poland; the Union of Lublin (1569) created the Polish-Lithuanian Commonwealth, a vast federation that at its peak covered a million square kilometers. But the Commonwealth weakened in the 18th century. In three partitions (1772, 1793, 1795), Russia, Prussia, and Austria divided it entirely. Most of Lithuania fell under Russian rule for 123 years. The tsarist government suppressed Lithuanian language and culture; even printing Lithuanian in Latin script was banned from 1864 to 1904.

World War I brought occupation by Germany; its collapse enabled the declaration of independence on February 16, 1918. For 22 years, Lithuania was an independent republic—until the Molotov-Ribbentrop Pact assigned it to the Soviet sphere. Soviet occupation (1940-1941, 1944-1990) brought deportations, collectivization, and the armed 'Forest Brothers' resistance that lasted into the 1950s. On March 11, 1990, Lithuania became the first Soviet republic to declare independence—over a year before the USSR formally dissolved. Soviet troops killed 14 civilians at the Vilnius TV tower in January 1991; international recognition followed that September.

Since 1990, GDP has grown over 500%, making this the fastest economic transformation in the Baltic region. The strategy was deliberate niche construction. Lithuania's central bank built a regulatory sandbox for fintech specifically to attract companies like Revolut during Brexit uncertainty. With 282 licensed fintech companies, Lithuania now hosts Europe's second-largest fintech cluster after the UK. Homegrown unicorns Vinted (secondhand fashion) and NordVPN (cybersecurity) emerged from this ecosystem. A laser technology cluster supplies precision instruments globally. Vilnius now generates €36 billion annually, outpacing Riga (€26B) and Tallinn (€24B). GDP growth holds at 3.1% for 2025.

By 2026, Lithuania faces the test of success: wages are rising faster than productivity. The talent that built the fintech cluster can now command European salaries—or relocate. The empire memory persists in ambition; whether the economy can sustain that ambition depends on whether niche construction can outpace wage inflation.